SciSys, the AIM-listed SITS supplier to the government, space, and broadcast & media sectors, had a ‘tough but successful’ first half to 30 June, according to exec chairman Mike Love, confirming the in line statement posted in July (see Scisys on track for growth). Revenue was up a respectable 5% to £22m, and PBT up 83% to £1.1m, giving Scisys a margin of 5% vs. 2.9% in H110.
Scisys said it has maintained a solid order book through H1 with contracts awarded worth ‘in excess of £20m’ – although this was flat on this time last year - which included repeat business with clients such as the BBC, the Environment Agency (see here) and ESA. Looking at its divisional performance, Scisys saw some growth across all but one activity area (space, government & defence, media & broadcast and application support were all positive). Environment was the real disappointment however. This is made up of its work for the UK’s Environment Agency, and saw revenue fall 44% to £2.5m. This is a surprise given that Scisys said it had achieved repeat business at the EA during the half. Perhaps less surprising is that Scisys now sees this division suffering most going forwards.
Scisys is making gradual progress improving its margins. The next boost should come from the removal of a ‘substantial rent liability’ on its headquarters in Chippenham, which it bought out for £5m. Scisys said this should have 'an immediate positive impact on profitability'. The £5m outlay however moved Scisys in to a net debt position of £2.4m vs. a cash position of £2.8m in H110, although with £6m of working capital it has more than enough to cover this. It is also making investments in a new CRM system to help it become a ‘tightly integrated pan European ICT company’, and is also seeking out further cost saving opportunities.
Although Scisys doesn’t split out its geographic revenues, it seems to be benefitting from the fact that over half its revenue now comes from outside the UK. Despite being cautious about the wider economic prospects in the UK and Europe however, it said it is on track to meet expectations for the full year – consensus estimates put revenue growth at c6% to £44.7m.